On 15 Sept. 2014, IVG Immobilien AG, a German real estate company, completed its in-court restructuring of €4.3 billion of debt within a record 13 months after filing for insolvency. IVG entered insolvency when the company’s diverse holders of financial instruments failed to find a consensual deal for the complex capital structure. The restructuring is one of the largest in-court restructurings by debt ever done in Germany, and a landmark deal for the use of a debt-to-equity swap under the application of the new German insolvency regime “ESUG,” which was introduced in 2012.
Kirkland & Ellis International LLP advised the largest lender group, an ad hoc committee of a €1.35 billion syndicated loan. The committee led the restructuring and insolvency plan negotiations after many of IVG’s original lender banks were bought out by distressed debt funds. Kirkland also assisted the wider lender group, comprising more than 60 different banks and funds, in developing and setting up the new holding structure for the implementation of the insolvency plan.
As part of the restructuring, the €1.35 billion syndicated loan 2007 and a €100 million bilateral loan facility were swapped into 80 percent of IVG’s new equity, and €400 million convertible bonds were swapped into 20 percent, indirectly allowing the investors to hold their interest through a Luxembourg holding entity.
Kirkland has now advised on the largest in-court, debt-to-equity swap and the largest out-of-court, debt-to-equity swap (SolarWorld AG, which closed in February 2014) in Germany, both of which will serve as a blueprint for future out-of-court and ESUG restructurings.
Restructuring partners Leo Plank and Sacha Lürken, corporate partner Björn Holland, tax partner Oded Schein and debt finance partner Wolfgang Nardi led the team, which included restructuring associates Wolfram Prusko, Carl Pickerill, David Penner and Ksenia Shubina, corporate associates Thomas Komanek and Marcus Klie, debt finance associate Karsten Raupach, tax associate Michael Schöpfel and senior case assistant Christina Lindenlaub-Kluckner. Restructuring partner Kon Asimacopoulos, tax partner Russell Light and corporate partner Carol Anne Huff covered the English and U.S. aspects of the transaction.
Kirkland & Ellis is a 1,600-attorney law firm representing global clients in complex restructuring, corporate and tax, litigation, dispute resolution and arbitration, and intellectual property matters. The Firm has offices in Munich, Beijing, Chicago, Hong Kong, Houston, London, Los Angeles, New York, Palo Alto, San Francisco, Shanghai and Washington, D.C.